With ushering an “ideas boom limited only by our imagination” in mind Mr Malcolm Turnbull seeks to essentially better the startups and investors market within Australia.
What?
Early Stage Innovation Companies (ESIC) that qualify will provide tax offsets and CGT exemptions to investors.
Why?
This is part of the Governments push to encourage commercial innovation in Australia by providing investors with incentives to invest is small innovative companies.
How?
- Incorporated within the last three years
- Company/group expenses are $1m or under
- Taxable Profit of $200,000 or less
- Not a listed entity on a stock exchange
- Qualify as innovative
The innovative principles require a company to show that they are genuinely focused on developing a new or significantly improved innovation for the purpose of commercialisation and show that the business relating to that innovation has high potential for growth, has scalability, can address a broader than local market, and has competitive advantages.
What are the benefits?
- A 20% non-refundable carry-forward tax offset, up to $200,000 per investor, per year; and
- A capital gains tax exemption for shares, which are held for more than 12 months but less than 10 years. For shares held for more than 10 years, the cost base of those shares will be their market value as determined on the 10-year anniversary date. Capital losses (whether the shares are held for more or less than 12 months) must be disregarded.
I’d love to have a discussion with you if you think you may qualify and could benefit or simply have an idea you’d like to talk about.
You can contact me on (02) 8207 6721 or via email [email protected]